Month: July 2020

The United States is preparing to pull more troops from Germany, days after President Donald Trump criticized the country for being “delinquent” on defense spending.U.S. Africa Command confirmed Friday it is in the early stages of moving its headquarters from the city of Stuttgart, where it has been located since the command was first stood up in 2008.“U.S. Africa Command has been told to plan to move,” its commander, Gen. Stephen Townsend, said in a statement. “While it will likely take several months to develop options, consider locations, and come to a decision, the command has started the process.”U.S. military officials have been looking for months at reducing the approximately 6,000 troops stationed in Africa.  FILE – U.S. Army Lt. Gen. Stephen Townsend watches during a tour north of Baghdad, Iraq, Feb. 8, 2017.“It is important our African partners understand our commitment to them remains strong,” Townsend said in Friday’s statement, adding his command “will continue to work with our African and other partners to address mutual interests.”While a new site for the command headquarters has not yet been chosen, an AFRICOM official told VOA that planners will be looking first to other European countries, and then at moving the command to the U.S.“The team will look at available infrastructure, housing, access to transportation, adequate medical care, and a range of other consideration factors,” said AFRICOM spokesman Col. Chris Karns.“It will be a deliberate and orderly approach and process,” he added, noting, “It was important to let partners as well as personnel and families know that planning is under way.”Africa itself, where the U.S. has long tried to maintain a small military footprint, is not under consideration, officials said.Just how much moving AFRICOM’s headquarters from Stuttgart will cost, and how much money could be saved by using another location, has yet to be determined.Reaction to changesWhile U.S. military officials argue the changes are strategically necessary and will give them more flexibility, German officials have expressed disappointment at the U.S. decision to pull some 12,000 troops from the country.FILE – Norbert Roettgen, Chairman of the Foreign Affairs Committee of the Bundestag, speaks during a press conference in Berlin, Germany, Feb. 18, 2020.”Instead of strengthening NATO, the troop withdrawal will weaken the alliance,” Norbert Roettgen, a senior ally of German Chancellor Angela Merkel and the chairman of the German parliament’s foreign affairs committee, told the Augsburger Allgemeine newspaper.U.S. lawmakers, including some Republicans who often side with Trump, have also raised concerns about the changes, though Sen. Jim Inhofe, chairman of the Senate Armed Services Committee, has called the moves “sound.”Trump defended the decision to pull troops out of Germany earlier this week, suggesting the U.S. could move troops based with other NATO allies if those countries do not increase defense spending.”We don’t want to be the suckers anymore,” he told reporters Wednesday.But some analysts have raised concerns that moving troops and critical commands from Germany will hurt overall operations.“We get huge benefits from our U.S. military posture in Germany,” said Bradley Bowman, a former adviser to members of the Senate Armed Services and Foreign Relations committees.“We are able to project U.S. military power into North Africa and the Middle East much more effectively because of our military posture in Germany,” said Bowman, now with the Washington-based Foundation for the Defense of Democracies. 
 
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Champagne is losing its fizz. For months, lockdown put the cork on weddings, dining out, parties and international travel — all key sales components for the French luxury wine marketed for decades as a sparkling must at any celebration. Producers in France’s eastern Champagne region, headquarters of the global industry, say they’ve lost an estimated 1.7 billion euros ($2 billion) in sales for this year, as turnover fell by a third — a hammering unmatched in living memory, and worse than the Great Depression. They expect about 100 million bottles to be languishing unsold in their cellars by the end of the year. “We are experiencing a crisis that we evaluate to be even worse than the Great Depression” of 1929, said Thibaut Le Mailloux of the Champagne Committee, known by its French acronym CIVC, that represents some 16,000 winemakers. Recognizing the urgency of the problem, the CIVC is launching unprecedented damage-limitation measures. Like oil-producing countries, the committee regulates the size of the harvest each year to avoid the kind of excess production that would cause bottle prices to plummet. At a meeting scheduled for Aug. 18, it’s expected to impose a cap so tight that record quantities of grapes will be destroyed or sold to distilleries at discounted prices. The prospect alarms smaller producers, who are more vulnerable than the big houses. Anselme Selosse, of Jacques Selosse Champagnes, called it “an insult to nature” that champagne’s famous grapes might even be destined to produce alcohol for hand sanitizer, as is happening in other wine-producing regions such as Alsace after demand spiked during the pandemic. “We are to destroy (the grapes) and we pay for them to be destroyed,” Selosse said, referring to the industry as a whole. “It’s nothing but a catastrophe.” “Champagne has never lived through anything like this before, even in the World Wars,” Selosse added. “We have never experienced … a sudden one-third fall in sales. Over one hundred million bottles unsold.”Paul Francois Vranken, Director of Vranken-Pommery Monopole speaks during an interview in the Champagne region, east of Paris, July 28, 2020.Major producers such as Vranken-Pommery predict that the crisis could last for years. “It should not be forgotten that (champagne) has lived through every single war,” said Paul-Francois Vranken, founder of Vranken-Pommery Monopole. “But with the other crises, there was a way out. For now, there is no way out — unless we find a vaccine.” Vranken said the very essence of champagne marketing — as a drink quaffed at parties and weddings — needs to be re-evaluated to reflect the new normal: Fewer festivities and a lack of celebratory group events. The new branding strategy for his, and other champagne companies, will seek to highlight the wine’s status as a naturally, and often organically, produced quality drink from a historic French region. “Even if the bars and the nightclubs are closed for five years, we don’t plan on missing out on customers … There will be a very big change to our marketing that highlights the grandeur of our wines,” Vranken said. Selosse, who produces many “natural” champagnes with no added sugar, also hopes the pandemic will encourage thought about future champagne marketing and how the multi-billion dollar industry is restructured. He would like to see a more cooperative side to production, such as “communal wine presses” to help pool the costs for smaller producers. Selosse said adaptability has served champagne well in the past, helping it evolve from a dessert wine in the 19th century to the modern-day dry version named “brut.”  He even thinks — but this is a minority view among producers — the industry could move away from effervescence and be able to produce all sorts of wine, as it did in the past: red, white or still. In fact, literally no fizz.
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The economy of the 19-country eurozone shrank by a devastating 12.1% percent in the April-June period from the quarter before – the largest drop on record – as coronavirus lockdowns shut businesses and hampered consumer spending.Economists say the worst of the downturn is past as many restrictions have eased, but that the recovery will be drawn out and vulnerable to renewed virus outbreaks.
Spain, which along with Italy was among the first to get hit hard by the spread of the virus, suffered the region’s heaviest drop at 18.5%. France, Italy and Portugal also endured steep declines, but no country escaped the impact of the pandemic.  
For the currency union as a whole it was the biggest decline since the records started in 1995. The broader 27-country European Union, not all of whose members use the euro, saw output sag 11.9%.
The decline in Europe compares with a 9.5% quarter-on-quarter drop in the United States, which unlike Europe has not yet been able to get its contagion numbers firmly down yet and whose economic recovery is in doubt.
European governments are countering the recession with massive stimulus measures. EU leaders have agreed on a 750 billion-euro recovery fund backed by common borrowing to support the economy from 2021. National governments have stepped in with loans to keep businesses afloat and wage support programs that pay workers’ salaries while they are furloughed. The European Central Bank is pumping 1.35 trillion euros in newly printed money into the economy, a step which helps keep borrowing costs low.
Those support measures have helped keep unemployment from spiking. The rate rose to 7.8% in June from 7.7% in May. But many job losses will wind up being permanent despite the stimulus.
Major companies such as Lufthansa, Daimler and Airbus have said they will cut thousands of jobs.
Economists say the downturn was concentrated in the months of April and May when lockdowns were most severe. Many restrictive measures have been eased, and business confidence in Germany, the biggest eurozone economy, has ticked up for three straight months.
But the outlook is for a long and uncertain climb back to pre-virus levels that could take until 2022 or longer. Company forecasts for the rest of the year assumed that there is not a renewed outbreak of COVID-19, the illness caused by the coronavirus. Cases have been rising again in several countries as people go on vacations and Britain slapped a 14-day quarantine on travelers returning from Spain.  
Rosie Colthorpe, European economist at Oxford Economics, said the current third quarter was likely to see high growth rates, “but not nearly large enough to make up for the damage.”
“Beyond this initial bounce, the recovery is set to be gradual and uneven,” with pre-virus output regained only by mid-2022, she said, adding that “recent flare-ups of the virus in several European countries risk derailing this recovery.”
The Spanish economic drop was by far the sharpest since the country’s national statistics agency began collecting data. Prime Minister Pedro Sánchez was meeting later Friday with the leaders of Spain’s regions to discuss how to rebuild the economy and where to deploy billions of euros in European Union aid for recovery.
Germany, the largest of the countries that use the euro, went through a 10.1% decline, the biggest since records started in 1970.  
In France, the startling plunge of 13.8% in April-June was the third consecutive quarter of contraction in France’s worsening recession. The pain has been so damaging to jobs and industries that the government is talking down the possibility of another nationwide lockdown as infections tick upward again. Finance minister Bruno Le Maire called on French people to spend more to help the economy recover.
“All the growth in GDP seen in the 2010-2019 decade has been wiped out in five months,” said Marc Ostwald, chief economist at ADM Investor Services International. In Italy’s case, economists said it wiped out about 30 years of growth.
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